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Questions? We have answers.

The following is a Transcript of Our Forum Questions at BNKToTheFuture
Please Feel Free to Comment your very own questions here or by joining the forum at BNKToTheFuture.com!
3035d586b3afea09834a37e428c6c5ee
09 February 2016

Hi, I’ll try and keep my questions as short and unique as possible (from the ones asked before), in the hopes of getting some answers:

– Your video mentions having hundreds of inputs into calculating how to know when someone will default on a loan – what are those? Do you take into account things like global warming (% chance of forced migration), political climate (friendliness w/ the US), amount of natural resources in the area for that person (and again, % chance of displacement), local currency fluctuations, economic indicators, both locally and globally, etc.? Not asking to provide us w/ the secret sauce, just wondering how the % default rate is calculated for the avg. mom in Ethiopia with 6 kids who’s earning earning $3 / day (BTW: default rates for poor people are much lower than rich people).

– You mention AI, but I am not sure that’s the right term: don’t you mean ML / machine learning (AI gives off a bad connotation I think..)? And do you plan to tie this into ML services by some of the big players like MSFT (Azure), IBM, Google and the like? And what of BI services around this? I consult at MSFT in Redmond; got good people using Power BI to do great analytics on Azure ML services; could be useful here too…

– How are you going to complete the service, if you will; app to local currency / ability to spend (b/c few to no street vendors in Africa are going to be accepting BTC). Do you have intnl finance experts on your team / a plan to offer a local currency option for all clients?

– Many companies in this ‘disruptive techonology’ crypto platform space are going after the unbanked (including 2-3 on this investment portal); is your loan default alorythm the only thing differentiating you from the competition? Do you plan to piggy back on top of some other services (where you’re not as strong)?

– Why ‘Gold’? – related to the possible need to put us all back on the gold standard? :-) And the coinbit.gold site appears to be down…got any other site that explains your services in greater depth?

Thanks,

Steve

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09 February 2016
Brian Sewell

That is our secret sauce, suffice it to say that any data with predictive value we use. Including various sensors on the phone that generate data.

Machine Learning is correct. We will likely bench mark our stuff against MSFT, IBM and Google, however our system is a little more advanced then where they are at currently for our specific application. Regarding BI: We do visualizations, although our best models are complex and almost impossible to interpret. We will definitely use BI tools on the business side however.

The app will have a built in exchange for many currencies similar to uphold. Check them out to learn more.

Bitcoin is the solution for the unbanked, however there must be practical use cases to incentivize the adoption of bitcoin. We are one of those practical use cases and we encourage many other companies to create more.

The algorithm is the secret sauce, but it’s the entire solution that meets the need. For example, it enables access to capital in minutes rather than weeks. Where else can you get that? It enables anyone from a remote village to wall street to generate stable and efficient returns. I can’t mention our partners, but yes we will utilize existing technology where it makes sense.

The name “GOLD” was chosen as it is easily recognized in every country in the world. We believe it creates an instant association with more reliable and trustworthy money.

You may wish to check out our youtube channel

https://www.youtube.com/channel/UCGWOU_bqHkCtFghmbqIamOA

 

 

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3035d586b3afea09834a37e428c6c5ee
09 February 2016
Steve LeMay

Thanks very much Brian for the responses; looks real interesting…you’ll be displacing an entire sector it seems, real exciting. And I’m sure you know, but the banks are trying to get out in front of this by building their own crypto-based services (which will in essence displace some of their own people), but it would still be proprietary / internal to that bank’s customer group, not universally for use like yours (and others).

I looked on the site, but see no apps / sample tool I can use to try this out; is there one? i.e. can I plug in certain data points (income, location, planned use for money, loan amt) and get an interest rate + terms kicked back out to me? I’d love to kick the tires…

And if you’re looking to visualize this content (loan details, by mkt segment / geo, etc.) into a BI visualization tool, would like help / interested in partnering w/ anyone, let me know; we can maybe help out.. (Power BI, Tableau and Qlik may be your best / most versatile options: all in the upper quadrant for Gartner in that area..), part of the build vs. buy decision..

Thx, good luck.

 

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09 February 2016

Thank you for your investment and confidence! I’ve personally funded this project to date to the tune of over 150k. We have to protect our IP and we only want to release the front end of the product and user interface when the back end is complete which is where we have spent most of our money. This is not my first rodeo; I’ve had many failures and a few successes in my career. I am financially independent. The technology and vision is awesome, but the big question is, can this guy execute? Can he manage cash flows? Can he achieve key milestones at or under budget? Can he navigate the ever-changing regulatory landscape? Can he inspire great people to follow him? Can he face the brutal facts, and make the tough decisions?   Can he mitigate the risks? Can he really achieve this ambitious vision? The answer is a resounding YES!

We are laser focused to achieve our next key milestone of delivering a beta product and will achieve that milestone with or with out the proceeds of this seed round. We are truly grateful to those who have joined us and strive to exceed your expectations.

 

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0918190755c69bcf9be87d17be438c3f

Just to be clear, GOLD owns and will own all the IP on the intelligent cost of borrowing mechanisms? I assume patents will be registered or at least that this will remain closely guarded proprietary company info and not owned by an individual that simply works for the company or licenced to the company by a related entity that we aren’t getting a stake in our something?

Assuming GOLD owns and can lock down as much of that smart cost of borrowing tech then I think there’s great value here on a number of fronts outside of the bankless banking market and utilizing it down the line could prove an important and profitable pivot should the need arise or simply as expansion when time allows. It has many obvious applications to improve many well established industries as well as the laudable current target for implimentation to provide finance to the world at large.

I’ve covered a little of this paper barrier stuff in some of my course work, the way in which poorer people are often denied access to commercial finance because they lack the documents required for bureaucratic access to markets. People who were born in a place where birth certificates weren’t issued and can’t legally prove their identify or people who have owned family land for decades or centuries but have no deeds or titles because it was simply handed down through generations and can’t take loams against it with a bank and often fall prey to predatory lenders who feed on those who need unofficial credit. The success of the Grameen bank and other similar micro-finance organizations shows the ready and hungry market out there, the right solution could be huge.

I think the big problem is going to be the actual roll out to the people who will use the product in the end. A lot of the micro financing companies had dozens or hundreds of people on the ground working directly to educate and work with clients, a roll out of GOLD will require a lot of marketing and education that will be very different in each market as well as detailed re-tooling of the front end for multiple, maybe dozens of languages and cultures. I’m sure a great deal of this could be done through social media (series of youtube videos got example)and other online avenues though. I could see it working as a cookie cutter back end, work with a local partner in each country who can tailor the nuanced local language to create the user interface as well as working on the actual local roll out and simply plug that front end into GOLD which does all the actual work.

I’m just not sure how GOLD would have the resources to create say an Amharic version of the app that’s accurate and reads naturally to an Etheopian as well as locally marketing to push adoption in a place like that while trying to do the same thing in dozens of other markets. If you partner with a small local team team in each region/language block to create the local user interface which plugs into GOLD as well as work on roll out and marketing then you’re going to encourage and spark a lot of small enterprises in these places as well as leveraging a lot of local knowledge and specialist advice. I’m not sure what the business model would be for that, paying them as contractors, dealing with them as partner companies that get a part of profits generated from the region they cover, perhaps even put together small teams yourself and stake them in the company itself and have small regional GOLD business units, I’m sure there’s lots of ways to do it and a solution can be found though.

I suppose my point is that if you’re trying to access the billions of un-banked people then releasing an app in English on the Google play store probably won’t do it and I’d love to hear more about the way in which it will be rolled out.

I think there’s a lot of value in the cost of lending technology alone though, I’ve invested and I’m very happy, if I read and hear more that I like I’ll be in for more! I’m surprised this one hasn’t filled up fast, it’s obviously a very interesting project. Once you have an end to end solution to ID and evaluate someone in short order you have s very slick piece of kit that can be applied to all sorts of things.

 

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09 February 2016
Brian Sewell

Yes, GOLD (Data Science Corporation) owns and will own the IP. We already have one of the best law firms in the U.S. assisting us with our IP strategy. You are getting a stake in the company that will own the IP. We will likely keep this entity separate from other business entities operating in various jurisdictions and license the IP to those entities to protect it. You seem to understand the reasons why we might do that, but for those reading this that would benefit from more clarity. Keeping the IP separate from the business operations entity protects the IP in the event of normal business risks such as lawsuits, unfriendly jurisdictions, financial problems in a specific jurisdiction, etc. It’s easy to fold or sell a business entity that is in trouble when the critical assets such as the IP are not owned but rather licensed by that entity. Then you simply restart a new entity and license the IP to the new entity and your back in business.

You’re dead on. You get it! There are important implications for our tech in many areas. The tech has a broad range of potential applications. It’s critical for any business however, to be laser focused on it’s target. We’ve chosen the unbanked as it clearly has a strong pent up demand for this solution and is a HUGE market. As we gain in scale in this market we will be better prepared to take on traditional lending institutions in developed regions.

We intend to focus on one geographical region upon launch to maximize our resources and gain market penetration. When we have narrowed our selection to three potential regions, my marketing team and I will be visiting companies and people in the region to gain local intelligence regarding the best way to penetrate the region. After our visits we will select the region with the highest probability of success. I’ve tentatively budgeted 1.5 million for the launch, but that number will change when our strategy is more specific. Gaining market feedback and adjusting until we are successful in one region will increase the probability of success rather than spreading limited resources over many regions at once. But after we have proven success, it will be easier to justify additional resources to scale.

You’ve mentioned a few possibilities to scale and I agree we will find the best solution. Yet we will likely control the user experience rather than outsource it to protect the brand. The user experience gets to be simple and elegant and we need to insure the user experience is beautiful to protect the brand. The language translation in the app is relatively simple.

For marketing we intend to use highly engaging video to promote the brand that has NO language in it, thus making the videos language agnostic.

Younger people all over the world will likely prefer to use our app rather than pursue traditional lending sources and we expect residual adoption outside our targeted region. Ideally we could go viral, as there is truly a strong pent up demand for our solution.

Additionally, our long-term strategy involves the development of what we believe will be the worlds largest super computer for artificial intelligence on an open source architecture similar to bitcoin and etherium. If successful, we will be aggregating and analyzing data on almost every person on the planet and this requires more computing power than has ever been assembled. Team member Wil Bown has successfully built this platform for which he won an award. We intend to support his work and leverage this platform providing the first major application of this technology. Building what we believe will be the worlds largest super computer for artificial intelligence has major implications in many other applications and verticals including finding cures to cancer, predicting terrorist activity or enabling a driverless transportation system. The potential applications are endless.

Having said this, it’s important to note that we are laser focused on taking the shortest route to market and to revenues by leveraging existing cloud technology and will migrate into this other platform after we are well into revenues. Wil Bown is a key player in the development of Gold and will ensure the migration path is a simple one at the appropriate time.

I hope you will join us and support us in doing something that we believe will truly make a huge difference in the world and leave a great legacy.

 

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One way to encourage potential investors to not wait until the last minute, at least for Bitcoin investors, could be to offer increased equity if the BTC price is higher at the moment the minimum is reached than it was at the time of investment.

Currently the equity percentage is fixed at the moment the investment is made. If BTC goes down and the minimum is never reached, the investor gets the same BTC amount back and loses out. If on the other hand BTC goes up and the goal is reached, he gets less equity than if he had held on to the BTC until the last moment.

This is of course not the only factor at play, but it does create an incentive to wait and see.

If on the other hand the percentage is decided by the highest price at either the investment or reaching the minimum goal (or closing the round), then there’s an incentive to invest early.

 

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09 February 2016
Brian Sewell

Great point Provoost. And thank you for your investment.

 

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F5f18a027968a04fce9b69c7ac04e7f0

Brian – In answer to Martin’s question below, you mention that you are “a respected data scientist in the community”. Can you please elaborate on this?

Your company’s vision is compelling but it all rests on the premise that you will manage to come up with this great AI / deep learning algorithm that will beat anything else on the market in its ability to predict default risk. In the absence of a proof of concept, personal credibility is key.

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06 February 2016
Brian Sewell

Personal credibility is absolutely key. I appreciate your question. Data Science has been a passion of mine for many years, as a practicing data scientist on a broad range of projects for government, university and private industry, I’ve been intimately involved in the evolution of data science. While most data scientists have been learning this new frontier, I’ve been associated with a handful of people pushing the outer limits by creating AI that replaces the data scientist and builds beautiful ensembles that are achieving extraordinary results.

Look at the people, team and partners around me. Google holds the patent for using AI to create a single model. Partner Justin Reber CEO of PurePredictive, holds the patent for using AI to create sophisticated ensembles. (Ensembles are algorithms consisting of many models layered on top of each other.)

Team Member Arno Candel – “2014 Big Data All-Star” by Fortune Magazine, chief architect at H20 and a founding Senior MTS at Skytree where he designed and implemented high-performance machine learning algorithms.

Team Member Wil Bown – Founder of the Award Winning Nuereal, the first decentralized open source protocol designed to produce a distributed artificial intelligence architecture incentivized, maintained and housed within a crypto currency.

There are a few others I’m not able to mention at this point, but my point is we have the best and brightest in this space to ensure a strong competitive advantage and that is largely due to my credibility. Our success will come from our team and NOT only from me.

For the data scientists in the room, let me cut the crap and speak frankly. A simple GBM model applied to this problem will perform more than sufficient, and blow away the antiquated methods through out the lending industry. The key, as you know, is the data and discovering the signal from the noise. This is our secret sauce and where we shine. We will still be leveraging our capacity to use AI to create really cool ensembles that increase accuracy and stability of the model, but as you know these increases in accuracy are minor relative to the increases gained by good data.

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1803a485ce6f6e923eb3236b3d06ad65

I like the concept of using AI, blockchain and all sorts of relevant data to work out the chance of default and cost of borrowing.

I have some questions.

1. Briefly, how do you mathematically use all of the data to work out the cost of borrowing? Do you assign a score for each piece of data, such as their location, income and so on, then use them to calculate the probability of default?

Just want to know a little more about the mathematical side of how your system works. I’m not expecting to know everything in full detail or your business secrets.

2. How do you intend to keep your competitive advantage in the long term? How do intend to strengthen it so that your direct competitors find it very hard to capture your niche?

3. Will the user be able to fully verify themselves and open an account in minutes? Looking into the case of Monese, an alternative ‘old school compared to bitcoin and the blockchain’ bank, the process of opening an account was literally very fast. It just took me a few minutes to verify myself, in terms of KYC needs, and then open a bank account with them.

 

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09 February 2016
Michael Graub

thx

 

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06 February 2016
 BF Support

New qualifying investors to our platform get their first investment of 100 StartCOIN paid for by BF.

There are several investors that have redeemed their free StartCOIN in Gold. The rest have invested at least the minimum.

Hope this helps.

 

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06 February 2016
Michael Graub

How can 15 backs invest just over $5000 when the minimum is $1000 to invest on the platform?

 

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05 February 2016
Brian Sewell

Thank you! Important questions so forgive my lengthy reply.

1. “The Brain” as I call it, is an ensemble of algorithms that learn in real-time from millions of data points. “The Brain” decides what is relevant and assigns weights to the data, thus creating a model to calculate the probability an individual will default on a loan. This probability of default + desired return = cost of money to the borrower. “The Brain” is ever learning and therefore the model is dynamically changing or getting smarter. Listen to Arno describe how this works in one of our videos here. https://youtu.be/3ligpcRIBrQ?t=3m59s

2. A very important question. 1) I am a respected data scientist in the community and have attracted the best and the brightest people to work with me. Our people make the difference. 2) Our app is a data collection device gathering data no one else has. 3) Exclusive data + great science = superior accuracy in prediction = lower costs to borrowers and higher returns to investors.

When the competition comes, and they will come, we will already have proven superior returns. I believe this will attract and keep institutional investors. How do you catch a company that has great data that you don’t, top tier scientists and first to market advantage?

We will strengthen our advantage over time by 1) reducing the fees of borrowing money to zero (A strategy I can’t share at this point) 2) Building our system to ultimately run on what we believe will be the worlds largest super computer for artificial intelligence. An award winning design created by our very own team member Wil Bown called “Nureal”. This is an open source architecture housed, maintained and incentivized in a crypto currency. 3) The contracts or process of borrowing and investing are created on a block chain using Ethereum. This creates a very robust, transparent and efficient mechanism for transacting. One of our developers wrote the very first contract on Ethereum. You can learn more about Ethereum here: https://www.ethereum.org/

3. YES! In minutes you’ll not only have an account but money, if you accept the terms, and are deemed credit worthy by “The Brain”.

 

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04 February 2016
Sergey Ilinykh

The main page claims that the company has only 2 employees and all shares are allocated to Brian Sewell. What about other people presenting the company on promo videos on the site? Aren’t they employees? Don’t they have shares in the company? Am I missing something? Thanks.

 

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04 February 2016
Sergey Ilinykh

Thanks, Brian, for the answer.

 

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04 February 2016
Brian Sewell

The other team members are technically contractors, advisers or board members. This mitigates risk and keeps overhead low. I’ve been funding the company myself thus far.

 

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03 February 2016
Sjors Provoost

Is it fair to say that Gold aims to be a smarter alternative to BTCjam?

Do borrowers get Bitcoin? Do you plan to offer any way for them to exchange those for local fiat, even cash?

What kind of KYC barriers are you expecting on the borrower side?

Do you already have a working (Android?) app that’s ready to go? If so, did you develop this internally?

 

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06 February 2016
Brian Sewell

That was a count down to company launch and not product launch. Technically we’ve already launched the company and ahead of schedule, a new website will follow soon. :-)

 

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05 February 2016
Sjors Provoost

Thanks Brian. I’m curious, what is http://coinbit.gold is counting down to in three days? I guess we’ll find out :-)

 

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03 February 2016
Brian Sewell

Good questions!

Much smarter. In BTCjam a borrower waits two weeks to see if they get funded. In Gold the borrower knows immediately what their cost of money is and can be funded instantly. In BTCjam investors invest in individuals or let’s the algorithm diversify for them. In Gold, investors invest in a pool and the AI funds the loans and manages the return for the pool.

The platform will enable exchange into many currencies similar to Uphold.

ID of individual borrowers is critical, we must have a reliable method of identifying individual borrowers. We are still ironing this out, however we have several tools such as facial recognition, bio metrics, etc. Yet we have limitations based on mobile technology currently available to the unbanked. I’m confident we will identify the best method.

This is an ambitious project, our focus internally has been on the infrastructure and proof of concept to be certain we can achieve our objectives and we’ve succeeded. We’ve answered important questions like “How do we predict a default rate on someone who may have little to no data available on them?” “How do we scale a platform that ultimately seeks to aggregate data, analyze and predict on every person on the planet?” “How do we build an AI that learns in real-time at scale so it’s always getting smarter and protects its self against bad actors who seek to game the system?” and many more.

So we do not have a working mobile app and have only just begun building the UI. It will be at least 6 more months before we have the mobile app ready to release. We believe this is a game changer and have already solved challenges never before achieved.

 

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58422d5f4e6adbc0310281877a4caee6

Great video Brian & such a fantastic company! I’m excited for you and for this new global platform in lending.

 

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05 February 2016
Brian Sewell

Thank you Brandy!

 

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6fc87c58667749c68001dce90d226ffb

Maybe this is a good reason to invest in GOLD

http://www.wired.com/2016/02/why-bitcoin-will-thrive-first-in-the-developing-world/

 

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06 February 2016
Brian Sewell

We’ve completed the hard part, the proof of concept on the Artificial Intelligence side and we are confident we can ID individuals and predict their probability of default. Our prototype is being built now. The alpha and then beta releases will happen later this year. Sorry I can’t be more specific at this point as my team will KILL me if I do. ☺

 

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03 February 2016
Daniel Howitt

I really like the concept. How close are you to launching?

 

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03 February 2016
Brian Sewell

It sure is. If your not already familiar, take a look at what has happened in Kenya with mPesa. https://youtu.be/cnzyn1SBJgw

 

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Is bitcoin capital 3 going to invest in GOLD?

 

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03 February 2016
Bitcoin Capital

Hi Daniel,

We are watching this company, but Bitcoin Capital policy is only able to co-invest in deals with independent lead investors to avoid conflicts of interests. This is a seed round so we will be watching Gold for their ‘series A’ round.

This means that we do not get as good a valuation as those that invest in the seed round, but it is the investment agreement policy of Bitcoin Capital.

 

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02 February 2016
 BF Support

Deals where Bitcoin Capital invests are marked on the pitch page to make investors aware of any conflicts of interests. This one has not been marked as a Bitcoin Capital investment.

Hope this helps.

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